The Strategist

Oil and agricultural commodities boost trade in G20

05/27/2021 - 04:04

Total G20 exports in the first quarter of 2021 rose 8 percent to $4.01 trillion from the fourth quarter of 2020, and imports rose 8.1 percent to $3.97 trillion, the OECD said.

In the fourth quarter, these figures rose to 7.5% and 7.2% from the previous period, respectively. Trade growth in the first quarter of this year was fuelled, among other things, by higher prices for agricultural commodities and oils (by more than 10%). As a result, suppliers such as Argentina (up 33.3%), Australia (17.5%), Brazil (14.7%) and South Africa (17.3%) recorded the largest increases. Oil prices also increased markedly in the first quarter (by 35%), with exports by Canada (up 10.8%), Russia (13.1%) and Indonesia (12.4%).

For the USA, exports increased by 5.7% and imports by 5.3%. China's exports increased by 18.9% and 19% respectively (imports rose at the expense of metals, cereals and semiconductors). In the EU, total exports increased by 3.8% and imports by 5%. The United Kingdom was the only G20 country to reduce its trade turnover in the first quarter: exports fell by 5.7%, imports - by 10.5% (the decline is due to both quotidian restrictions and base effect - UK companies increased their purchases late last year in anticipation of leaving the EU).

Services turnover of G20 countries is expected to recover slower than trade in goods, where the negative effect of restrictions is more noticeable. Total services exports rose 4.4% to $1.08 trillion and imports rose 2.5% to $958 billion. Growth was recorded in transport, digital and financial services. Services exports grew strongest in China (plus 22.7%) and Turkey (plus 13.1%). 

Note that GDP growth in advanced economies was weaker in the first quarter than at the end of last year. Average GDP growth in OECD countries slowed down to 0.3% in the first quarter of 2021 from 1% in the fourth quarter of 2020. On a year-on-year basis, GDP growth in OECD countries remained negative at minus 0.8% after minus 2.9% in the fourth quarter.